Fleetwood Enterprises Inc. anticipates reporting another financial loss for the first quarter of its fiscal year 2002, which will end in late July, according to Nelson Potter, president and CEO.
Potter presented his forecast during a conference call with analysts after the stock market closed Wednesday afternoon (June 13).
Earlier Wednesday, Fleetwood reported it lost $44.5 million during its fourth fiscal quarter and $284 million during its fiscal year 2001, both of which ended April 29.
Boyd Plowman, Fleetwood’s senior vice president and CFO, said Fleetwood’s loss for the May-through-July quarter should be “cut fairly significantly” when compared with the previous quarter, unless RV or manufactured housing industry market conditions deteriorate further.
Fleetwood’s motorhome sales, in terms of unit volume, were down around 40% during the first five months of this year, when compared with the same portion of 2000, Potter said. This was reflected in the 49% decline in Fleetwood’s motorhome sales revenue during the February-through-April period, he added.
The lower retail demand for motorhomes forced Fleetwood and other manufacturers to discount wholesale prices and offer rebates to dealers. Potter said the amount of discounting “is not worse than it was three or six months ago, but it’s not any better either.”
The discounting and rebate programs lowered Fleetwood’s gross profit margin on motorhome sales to 9.6%, from 16.6% a year-ago, Plowman said.
Fleetwood has lowered of its motorhome dealer inventory to around 3,700 units, compared with 5,900 Fleetwood-built motorhomes on dealers’ lots last summer, Plowman added.
Fleetwood’s motorhome inventory will rise slightly in the next few months as the company begins to ship model year 2002 units to dealers, Plowman said.
To respond to the economic slowdown and other market conditions, Fleetwood closed 10 manufactured home plants and three RV assembly operations during its fiscal year 2001. No additional plant closures or employee layoffs will be needed if RV and manufactured home market conditions “hold steady,” Potter said.
“We feel we are well-positioned for the future, but the timing and degree of a turnaround are uncertain,” Potter said. “We are concerned about fairly low consumer confidence and fairly high gas prices, both of which stall RV buying decisions.”